By Jodi Schwan and Megan Raposa

The assessed value of the Platinum Point 52-unit town home complex in south Sioux Falls jumped 35 percent last year — and the developer said it’s just one example of a troubling trend.

An appeal by Lloyd Cos. to adjust the increase was turned down, but the company is trying again this year.

In the meantime, “we really postponed a rent increase because I didn’t want to go back to tenants and say you need a 30 percent increase,” board chairman Craig Lloyd said.

“And I have to have regular increases to keep up the water bill and maintenance bill and everything that goes with it.”

That increase followed an assessment by Lincoln County. This year, Minnehaha County did the same, and Lloyd saw several multifamily properties increase between 25 percent to 40 percent in assessed value.

The company is appealing those too.

“We’re protesting six or eight properties out of 100-some, so it’s not bad, but my concern is if you talk to any council person at the county or city and say, ‘What do we need?’ What’s going to come out? They’re going to say we need affordable housing,” Lloyd said.

“So you’re taking the most affordable housing, with some of these properties, and increasing assessed valuation by 30 to 40 percent, and everything you dreamt about affordability went up.”

For units that several years ago rented from $550 to $750 per month, increases in property taxes and other expenses can push up rents by $100 per month, he said.

The increase in assessed value is tied to recent apartment building sales “and just the market worldwide,” Lloyd said. “I don’t care if you’re in Sioux Falls or Des Moines or wherever, things are selling for nutty prices.”

Increased assessed valuations have been a common theme among multifamily property owners, said Denise Hanzlik, executive director of the South Dakota Multi Housing Association.

“There are increases,” she said. “As I understand it, the counties are reevaluating property values, which in turn increases property taxes, similar to what Lincoln County did three years ago.”

Lloyd was able to successfully appeal to Minnehaha County last week on multiple properties and in some cases compromise within a few percentage points, “so at least there’s a good spirit there,” he said.

“But my opinion is we have to look at a different method of tracking assessed valuations that doesn’t kill the affordability factor.”

It also could become an issue for residential property owners.

“The cost of homes has skyrocketed, not only on the construction side, but on the sales side,” said Chris Lilla, director of equalization for Minnehaha County. “Typically, in past years, say the market goes up 3 to 4 percent annually. This past year alone … the county as a whole increased 5.64 percent.”

In Lincoln County, some areas were hit harder than others. Tea, for example, is seeing a record number of new homes being built. Homeowners there say they saw increases in assessed values in the $20,000 range all the way up to $70,000.

“Tea was ultimately our biggest impacted market adjustment,” said Karla Goossen, director of equalization for Lincoln County.

In Minnehaha County, some people may have seen big changes because assessors had a more specific, refined way of determining values in 2020 compared to previous years.

In past years, Minnehaha County assessors were comparing properties against other properties in a broad geographic area. New software allowed the county to get more specific this year.

That means a house that was previously compared to 2,600 other properties was now in a pool with only about 700.

“Before, we had neighborhoods that had million-dollar homes to $90,000 homes,” Lilla said. “Now, we’ve put everybody in their own car, if you will … it should be much more fair.”